Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
A new Vietnamese consumer is emerging…
There are different types of consumers in the Vietnamese market. On the left there is traditional Vietnam, countryside 50 km of Ho Chi Minh city. On the right you have a picture of Ho Chi Minh city, vibrant, with sophisticated consumers, modern. And this picture could have been taken in any urban center in the world. What you see, is rising middle class with the same trends that you see across the globe.
Individualization, even if it is an Asian country, where being together, the link between the generations is extremely important, you see that the new generation is more individual than the previous one.
You see a lot of regional differences of the consumers’ behavior of Ho Chi Minh and other big provincial cities Da Nang, Nha Trang and even My Tcho when you compare to other secondary cities or even rural Vietnam.
What you see appearing, both in an urban center or rural areas consumers are paying more attention to health. Health is definitely important for them.
There is also rise of convenience, especially Ho Chi Minh city, may be you have seen it, when you landed in the airport, a lot of convenience stores, for the time being we see it mostly in Hanoi, but this phenomenon is growing and growing.
The last but not least, Vietnam is extremely digitally savvy. Consumers are really connected to the internet, Facebook is big but not only Facebook, all digital connections matter a lot. Much more than you could expect from an emerging market.
The premium segment in Vietnam is growing, growing rapidly. On that VBL is really well positioned with our premium portfolio to tap into this premiumization
At the same time the mainstream accounts for 71% of the total market that is why broadening our strategy is critical for maintaining the momentum of growth we have developed at VBL.
Also even if off-trade remains dominant, we see growing strategy of on-trade, which is to a certain extent linked to the growth of convenience. But in the both segments VBL is actively developing strategies, both in on and off premise.
In terms of pack types, it is interesting to see that the biggest pack type is bottle indeed it is a returnable material, so it is predominantly drunk in the on trade sector. But can has a unique perception in Vietnam compared to the rest of the world. Can in Vietnam is perceived as more premium, and the price for consumers in can is higher than the same brand in bottle.
What you see appearing in the bottle segment is that the share of the small bottle of 330 or 350 mln is growing whereas the big volume brands of 450/640 ml are declining.
And in the both pack segments, so the can and small bottle, VBL is indeed growing on over indexing versus competition, so we are going faster in the premium segment which growing and we are going faster in the small bottle and can segments.
17 May. 2016